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United Airlines’ decision to take a USD100 million stake in Brazil’s third largest airline Azul is a highly strategic move to entrench itself in the important Brazilian market and occurs after TAM’s exit from the Star Alliance left a significant hole for United to fill in its Brazilian operations.

Through its stake in Azul, United also gains a seat on the Brazilian airline’s board which, similar to the Delta-Gol tie-up, gives United insight into Azul’s strategy and long term vision. In the short term, plans are underway for a codesharing pact following an interline agreement the two airlines struck in 2014.

The deal with Azul is a solid step forward for United in gaining some lost ground in Brazil; but it will still not completely fill the void created after TAM’s departure from Star. United and Azul may also need to revisit their joint strategy in serving the US and Brazil in light of their new partnership, and the upcoming implementation of open skies between the two countries.

Brazil’s fourth largest airline Avianca Brazil marks a milestone in Jul-2015 when it formally joins the Star Alliance. With Avianca Brazil finally entering Star the alliance will be able to fill some of the void left by TAM, which jumped to oneworld in 2014 as a result of its 2012 merger with LAN.

But Star has also been courting Brazil’s third largest airline Azul, whose chairman David Neeleman recently prevailed with his partners in acquiring TAP Portugal, a Star member which is also the largest carrier in the Brazil-Europe market. For now Azul does not seem interested in joining a global alliance and is instead focusing on concluding codeshare discussions with JetBlue and United. But eventually Azul could reconsider and give Star two Brazilian members.

Although Brazil is presently enduring economic weakness, Star’s pursuit of two airlines to fill the gap created by TAM’s exodus shows the long-term strategic value of the country, which is by the largest in Latin America. Star clearly sees a need for two Brazilians members in order to fully restore its presence in the Brazilian market.